A judge has reversed a ruling made late last year regarding the former Concordia University campus in Portland. That’s just the latest decision in an ongoing $302 million lawsuit surrounding the closed school.
Back in December, Multnomah County Circuit Court Judge Eric Dahlin struck down a “lis pendens” on the Concordia property. A lis pendens is a notice that a property has a pending lawsuit associated with it. In January — a month after making his original decision — Dahlin reversed himself after gaining more information from attorneys. The new ruling allows the lis pendens to stay in place.
The initial ruling to remove the lis pendens could have made the 13-acre property easier to sell, but Dahlin said keeping the notice in place for the property won’t prevent a sale completely.
The Concordia University campus in Northeast Portland on Feb. 10, 2020, the day faculty, staff and students learned the 115-year-old private college was closing.
Rob Manning / OPB
Dahlin wrote in a message to attorneys that the lis pendens “is simply constructive notice to the world that there is litigation related to the underlying property so that future buyers can take that into account when deciding whether or not to purchase the property.”
In 2020, following the closure of Concordia Portland, the technology company HotChalk sued the university and others connected to it. HotChalk had managed the school’s online programming before it closed, helping Concordia grow into the largest private university in Oregon before it closed. In its lawsuit, HotChalk argues that the former university and others connected to it owe money for a breach of contract, fraud and other allegations. Around the time HotChalk filed the lawsuit, it also filed that lis pendens on the campus in Northeast Portland.
Along with Concordia Portland, HotChalk is suing the Lutheran Church Missouri Synod, the organization which supervises the Concordia University System, including the former Portland campus; the Lutheran Church Extension Fund, a nonprofit financial institution that supports Synod organizations through loans and other financial assistance; and others, like individual members of Concordia Portland’s Board of Regents.
One of the defendants, the Lutheran Church Extension Fund, or LCEF, is the current owner of the Portland property following a foreclosure sale last summer.
In court documents, the LCEF said that the lis pendens had made selling the property more difficult, by creating a “cloud” over its title.
It also argued that HotChalk does not have direct involvement with the property itself to justify keeping the lis pendens.
Judge Dahlin initially agreed at the hearing last year. But HotChalk’s lawyers wrote to Dahlin following the decision noting that the technology company had included in its complaint the request to negate any “fraudulent” transfers from Concordia Portland to its partners, including the LCEF which purchased the property — meaning that its lawsuit does have an interest in the property itself.
“Simply put, HotChalk’s lawsuit against LCEF is inextricably interwound with the property,” Gabe Weaver, an attorney for HotChalk, wrote in an email to Dahlin.
Dahlin noted even without the lis pendens on the property, anyone who is interested in buying the former campus would be aware of the litigation if they did “even a minimal amount of due diligence.”
Another question brought up in the hearing last December has not been resolved yet.
HotChalk attorneys have requested documents from the Lutheran Church Missouri Synod hoping to prove that it played a role in Concordia Portland’s closure. In its legal complaint, HotChalk said that both the Missouri Synod and the Concordia University System as a whole objected to the Portland campus’ services for LGBTQ students.
The synod had refused to turn over any relevant documents — court discussions suggest there are more than 2,000 of them — stating it should not have to reveal any internal church communications.
At the last court hearing, Dahlin ordered the synod to turn over 25 random documents for him to review in private to get more context on the types of records at issue. An attorney representing the synod said Dahlin has reviewed those documents. In a sealed hearing next month, Dahlin will meet with church attorneys to get more context on the documents he read.
A trial date for the case has not yet been set. At the hearing in December, Dahlin and attorneys spoke about potentially scheduling it for 2023.